invest in ukraine · rate in ukrainian history. at the same time demand exceeded supply more than 5...

Invest in

Ukraine

The Cabinet of Ministers of Ukraine12/2 Hrushevskoho street, office 148Kyiv, 01008, Ukraine

Find your opportunities here!

+38 044 256 7832

ukraineinvest.gov.ua

UkraineInvest

© UkraineInvest, 2020


In six short years since the Revolution of Dignity, Ukraini-an society has undergone a tectonic shift, shedding its Soviet past and unalterably choosing a pro-western democratic orientation that gains strength and momen-tum daily.

Driven by the passion and determination of a new gene- ration of young reform-minded leaders, since 2014 the country has undergone a transformation from deep crisis to macroeconomic stabilization. The govern-ment has introduced effective anti-corruption mea-sures – such as ‘Prozorro’, Ukraine’s world-class trans-parent procurement system – which save the state budget $6 billion each year; unbundled energy sector monopolies; brought transparency and accountability to public finances and expenditures; began the imple-mentation of law enforcement, judicial, healthcare, education, pension and privatization reforms; dramatical-ly improved the investment environment; and signed a ground-breaking Deep and Comprehensive Free Trade and Association Agreement with the European Union that is integrating the Ukrainian economy into Europe-an supply chains and institutions.

As a result of the steady pace of reform, stakeholders now believe that Ukraine is truly becoming an attrac-tive place in which to make money. Investors have recognized that Ukraine has become a stable and pre-dictable emerging market and that the availability of talented human capital and high-quality undervalued assets make Ukraine an excellent investment destina-tion. In 2020, the country climbed seven more places in the World Bank’s Ease of Doing Business ratings, to 64 out of 190 countries, and the Bank rates Ukraine second among the countries of the world in the last 10 years regarding the speed and depth in the improve-ment of the business climate. Between 2015-2019, Ukraine witnessed foreign direct investment flows of $16 billion, resulting in the construction of over 100 manufacturing plants, representing tens of thou-sands of new high-added value jobs. These include a $ 200 million state-of-the-art seed processing facility

by Bayer from Germany, a $150 million grain terminal by Cargill from the US, a second $16 million manufac-turing site by US-based Jabil, and the arrival of such global brands as General Electric, Ryanair, HEAD, IKEA, H&M, Decathlon, and many others.

As the Ukrainian government’s investment promotion agency, UkraineInvest facilitates inward foreign invest-ment and assists existing investors to expand their businesses in the country. To this end, we pursue a 1+4 sector strategy focusing on the key drivers of Ukraine’s economy: we emphasize Innovation Technology as the main added-value ingredient to the development of the Agribusiness, Manufacturing, Energy, and Infrastru- cture sectors. Ukraine’s greatest assets – its “brains and grains” – produce the innovation and opportuni-ties found in Ukraine’s agri-food value chain; the growth of European and global supply-chain manufacturing clusters in the country’s fast-growing regions; and in the development of oil, gas and renewable energy re-sources derived from Ukraine’s pursuit of energy inde-pendence.

The benefits of these opportunities are readily evident in the meteoric rise of Ukraine’s IT sector. Pushed by demand for Ukraine’s annual graduation of 130,000 engineers, the innovation technology sector has expe-rienced 20% growth annually, exploding from a fringe economic activity to becoming the country’s largest service export. Indeed, the growth of IT services and products in Ukraine grew by 25% in 2018 alone, with the sector achieving a current value of $4.5 billion. With growth in this area expected to double over the next five years, Ukraine is well on its way to making a major impact on the new Digital 2.0 world in which we live.

Your takeaway?: Ukraine is open for business! As the country continues to undergo seismic democratic and economic transformation, it is integrating ever deeper into the Euro-Atlantic and global economic architec-ture. Savvy businesses will Invest in Ukraine NOW!

INNOVATION & OPPORTUNITY!Ukraine is

Contents

Ukraine: Key Facts1

3

6

4

2

5

5

10

28

12

6

14

Ukraine on Charts

Investment Opportunities of Ukraine

Eurointegration

Privatization

Сoncession

Finance

Business

6

7

7

8

9

14

18

22

24

26

Innovation Technologies

Agribusiness

Manufacturing

Energy

Infrastructure

Transformation Ukraine

Risk Assessment of Ukraine as an Investment Destination

Business Associations

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Volume 1 Ukraine: Key Facts

IN 2018ACC. TO THE WORLD BANK

$ 390int.

billion

GDP (PURCHASING POWER PARITY)

$ 420per month

AVERAGESALARY

$ 2.38

BIG MACPRICE

WORLD’S 7TH lowest index price

(January 2020)

17 FTASWITH:

46countries

Economy

Area

Political System

Population

CurrencyDiaspora Worldwide

POLAND

SLOVAKIA

HUNGARY

ROMANIA

MOLDOVA

BELARUS

UKRAINE

RUSSIA

Market economyMajor industries: world player in agriculture industry, developed energy, metallurgy, chemicals, manufacturing, massive innovative industrial base, booming IT and high-tech sector

603,500 square km(the largest country

within Europe)

Parliamentary-presidential republic

42 million 70% urban-basedSource: State Statistics Service of Ukraine, data as of 2020

Ukrainian hryvnia – UAH average rate – 26.4 UAH per USD(official average exchange rate in March 2020, according to National Bank)

20 million strong network

writ

ten

in 1

710

by U

krai

nian

Koz

ak H

etm

an P

ylyp

Orly

kFi

rst c

onst

itutio

n in

the

wor

ld

MOST COST EFFICIENT MANUFACTURING

PLATFORM IN EUROPE

(December 2019)

DCFTA with EU, FTAs with CIS, EFTA, Canada, Georgia,

Macedonia, Montenegro, Israel. On-going negotiations with

Turkey

Volume 2 Transformation Ukraine

6

EU-Ukraine total trade and EU share in Ukraine’s trade

Demonopolization of alcohol industry

Law on the joint transit regime and introduction of the national electronic transit system

Law on unbundling of Naftogaz

Law on protection of the rights of financial servicesconsumers

Following the Revolution of Dignity, Ukrainians affirmed their desire to live in a free, democratic, western-oriented

and economically stable country by amending Ukraine’s Constitution regarding the strategic course of the state for

obtaining full membership in the EU and NATO.

EUROINTEGRATION

Following the signing of the Association Agreement and the Deep and Compre-hensive Free Trade Area with EU, Ukraine has done a lot to bring its rules and regulations in accor-dance with the EU legislation. The EU-Ukraine integration has already resulted in significant growth in bilateral trade and investment.

TECHNICAL BARRIERS TO TRADE

INVESTMENT

Law on authorized economic operator at customs

FINANCIAL SERVICES

‘Split’ law

Amber mining legalization

Aerospace liberalization

ENERGY SECTOR INFRASTRUCTURE

Concession law

EU-Ukraine total trade, $ billion EU share in Ukraine’s total trade, %

Ukraine’s Government continues its way towards approximation of national laws and regulations with the European legislation.

2017

44.3

40.6%

2019

53.6

40.4%

2016

36.1

39.4%37.4%

2015

34.0

35.8%

2014

45.2

2018

50.7

41.4%32.2%

2013

52.2

$ billion

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Opportunities for Investors with the Privatization Law

PUBLIC SYNERGY

OPENNESS

GOVERNING LAW CLAUSES

was

foun

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PRIVATIZATION

СONCESSION

Ukraine’s willingness to finally launch a major privatization of stateowned assets is one of the most

important signals to foreign investors. With more than 1,000 state owned entities set to privatization in the coming years,

Ukraine offers unique opportunities for foreign business.

Possibility of dispute settlement by means of

international arbitration

Possibility to conclude sales agreement under

English law

All potential buyers have access to small privatization

via system of electronic auction

Professional advisor involved in large privatization can attract wide

range of potential buyers

In October 2019, the Verkhovna Rada adopted the Concession Law, which regulates conditions for the transfer of state and municipal property for

business use. It increases the investment attractiveness of Ukraine and will lead to upgrade of infrastructure, including ports, airports, roads, etc.

CONCESSION AS A MODERN PPP INSTRUMENT

TRANSPARENCY

ADVISERS & INDEPENDENT

EXPERTS

CREDITOR PROTECTION

FLEXIBILITY

QUALITY ASSURANCE

• Project finance opportunities• ROI safeguards

• A wide array of strategic assets open for investment

Can be contracted to support the preparation of

concession projects

Right to replace the concessionairein case of fundamental breach of contract

Option to convert state property lease into

concession

Several authorities mayconstitute a single

concessor for the purposes of the project

Both state and private entities can initiate concession projects

Freedom to choose governing law for contracts in the course of project implementation

• Prior stocktake/independent evaluation of the property• Prohibition on alienation/write-off of property after the decision on the need of concession is made

• Concessionaire selection according to the best international practices• Clear deadlines, stages and criteria• Creation of an online platform for concession procedures

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FINANCE

In recent years, thanks to the support of foreign partners, Ukraine has achieved significant progress in macroeconomic stabilization: the banking system was cleaned up, inflation fell, the current account and state budget deficits reduced, the government debt to GDP ratio decreased, while foreign exchange reserves grew significantly and exceeded $20 billion.

The level of state and state-guaranteed debt atthe end of 2019 decreased to 51.6% of GDP from 62.7% in 2018. The Ministry of Finance expects that Ukraine’s public debt will furtherdrop to 47.5% in 2020.

In January 2020 Ukraine placed 10-year €1.25 billion bond at 4.375%

The bonds were issued at the lowest coupon rate in Ukrainian history. At the same time demand

exceeded supply more than 5 times.

Record high profitsposted by the Ukrainian

banking sector in 2019, which is 3 times more

than last year.

Ukraine’s international reserves are at their highest levels in 7 years – $25.3 billion as of end of 2019, which was driven by a steady inflow of foreign capital into the country.

Public debt as at year end International reserves as at year endPercentage of GDP, % $ billion

79.162.7

billion

billion profit

1.25 €

2.5 $

20162015 2017 2018 2019

15.518.8

25.3

$

$

$$

$

13.3

20.8

$

71.880.971.8

51.6

20162015 2017 2018 2019

CzechRepublic

Ukraine Hungary Poland Turkey

1524

71.8

19

42

12

As of 31 January 2020, the share of Ukraine’s hryvnia bonds held by non-resident investors rose to 15%, from near zero at the beginning of the year. Ukraine is now perceived as a stable and predictable emerging market by foreign investors.

Share of non-residents in domestic government bonds as of end of 2019, %

Key policy rate decreased to 10%The NBU continues to ease its monetary

policy with the aim of maintaining inflation at the target level of 5% and supporting steady

economic growth.

10 %

the size of the fund:

a startup can obtain for its business

18 $

75k $

LAND MARKET REFORM

Ukraine is an agricultural superpower and a leading producer of cereals as well as other crops. At the same time, Ukraine remains

one of the few countries where there is a moratorium on the sale of agricultural land. This will change in July 2021 with the launch of land market, which will inevitably be a catalyst for significant investment

and increase industry productivity.

million

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BUSINESS Reduction in financial resources cost for private business is one of the most important conditions for economic growth. Lower interest rates

make many business projects more viable. Ukrainian government is well aware of this, therefore it introduced program “Accessible Loans

5 - 7 - 9%” for small and medium entreprizes (SMEs) and Ukrainian Startup Fund to finance innovative projects.

was

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n Ig

or S

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in 1

939

Firs

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Accessible loans

Ukrainian

110k $up to

SME can obtain for its business

1.25B $

the total amount of the program for 5 years

AI AR/VR

Big Data

Cyber SecurityFin Tech

IoT

E-commerce

EdTech

new jobs to be created

90k

5-7-9 %

Startup Fund

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Ukraine ranks sixth globally in terms of visa-free gains over the past decade according to Henley Passport Index. Now

Ukrainians have visa-free access to 128 countries.

47

64

50 Human Capital IndexUkraine entered the top 50 countries

in the World Bank’s Human Capital Index Source: worldbank.org

World Bank Ease of Doing BusinessSince 2014 Ukraine has improved 48 positions in Doing

Business Ranking and is ranked 64th in 2020 report

Source: doingbusiness.org

Global Innovation IndexUkraine is in top 50 most innovative nations in 2019

Source: globalinnovationindex.org

6

1

Henley Passport Index

Good Country IndexUkraine’s Science & Technology Global Contribution is ranked

at an admirable 1st place out of 153 countriesSource: goodcountryindex.org

Source: henleypassportindex.com

B; Positive B; Stable Caa1; Positive

Sovereign credit ratings in 2020

11www.ukraineinvest.gov.ua Invest in UkraineNOW

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t sub

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the

wor

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05 m

)

11287 81 80

76 71 64

2014 2015 20172016 2018 2019 2020120

80100

6040200

5068

38 30 40

14

Ukraine Romania PolandHungary Slovakia Czech Republic80

4060

200

71 63 6456 50 4743

2013 2014 20162015 2017 2019201880

4060

200

13 14

1 1 1

2015 2017 20182016 201916

812

40

2014 2015 20172016 2018 202020190

4020

6080

100120140

828179 79

128 128126

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Volume 4

Risk Assessment of Ukraine as an Investment Destination

Growing demand for High Tech

17 FTAs with 46 countries (including Association Agreement

and DCFTA with EU)

Unprecedented transformation and structural reforms

Efficient high quality production base

Strategic geographical position, at the crossroads of Europe and Asia

Largest in Europe underground gas storage facilities (1/3 of EU-28 capacity)

Historically developed human capital of 42 million population

100+ global companies have R&D facilities in Ukraine

Lack of qualified labour force in Europe

Saturated European markets (overloaded capacities and lack

of free agricultural land)

Growth in demand in Europe and in the world for high quality Ukrainian goods (namely for food

products, metals, wooden products, etc.)

Further integration to EU (economic, financial, infrastructure)

Upward trend for renewable energy around the world

Increase of trade flows between Europe and Asia

INTE

RNA

L ST

REN

GHTS

EXTERN

AL O

PPO

RTU

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Russian aggression against Ukraine

Dynamic political environment

Relatively low purchasing power of internal market

Mostly limited access to cheap financing

“Brain drain” - large-scale migration of Ukrainians to EU

Obsolete infrastructure

Monopolization of certain industries

Developing rule of law and corruption risk

Attraction of Ukrainian labour force by neighbouring countries to come to work for their economies

Launch by Russia of the “Nord Stream 2”, which may put pressure on Ukraine`s gas supplies

Increase in prices for fossil fuels (oil and gas)

Global commodities prices vulnerability for key Ukrainian exports

(agri-food, metals)

Ukraine’s economic development and attraction of foreign investors under the current globalization conditions depend on its internal capacity and functioning of management mechanisms, as well as cooperation with international community and business.

INTERNAL W

EAKN

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INNOVATION TECHNOLOGIES

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4,00021

100 +

184,700

#1

top 25

#1

TECH COMPANIES

IT SERVICE PROVIDERS with offices in Ukraine present in the 2020 Global Outsourcing 100 list

FORTUNE 500 COMPANIES have chosen Ukrainian IT services

SOFTWARE DEVELOPERS

SERVICE SECTOR BY EXPORTS

BEST COUNTRIES for software development

IT OUTSOURCING & SOFTWARE DEVELOPMENT POWERHOUSE IN CEE

INNOVATION TECHNOLOGIES in Ukraine

Ukraine’s IT industry has grown by nearly 40 times over the last fifteen years, from $110 million in 2003 to about $4.5 billion in 2018, achieving an impressive cumulative average growth rate of 25%.

5k4k

3k2k

1k0

Ukraine IT outsourcing

Source: Ukrainian Hi-Tech Initiative, Symphony-solutions, Tech Ecosystem Guide to Ukraine, MoEDT estimates

Total size of the market, USD million

110

165

250

390

544

530

697

874

1100

1400

2000

2379

2500

3000

3600

4500

2003

2004

2005

2006

2007

2008 2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Ukraine’s IT industry is among the country’s fastest growing industries. It is also diverse, from cutting edge work in AI, cyber security, natural language processing and nanotechnologies to highly commercial ventures in blockchain, FinTech, big data management, gaming, agribusiness and e-commerce.

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41 France

50

40

30

20

10

0

60 70 80 90 100

According to Gartner, a global research and advisory firm, Ukraine’s IT specialists rank first in Eastern Europe in terms of price/quality ratio.

Average annual software engineering salary, February 2020

Source: daxx.com, payscale.com

73 Israel 107 USA 67 Denmark

61 Norway 55 Germany

4x

40 United Kingdom

30 Ukraine

FranceGermanyTurkeyUKPolandSpainItalyRomania Ukraine

Historically, Ukraine has been a centre for software

development, technology solutions for data analysis and processing. A key role here is played by the level

of technical skills, a hallmark of Ukraine`s

education system.

130105

937571

6656

4839

Top European countries by number of engineering graduates

Source: World Economic Forum, Forbes

Thousand people

The key to the success of the Ukraine’s IT industry lies in combining an extensive IT talent pool, favourable geographical position and time zone, strong technical and scientific legacy and cost benefits.

$ thousand

45 Sweden 44 Finland

16

START-UPS

Ukrainian startup companies offer cutting-edge solutions

in the most promising areas of innovation technology –

Artificial Intelligence, Cyber Security, Big Data Analytics,

Internet of Things, VR/AR, Blockchain, and FinTech.

Startup Investment in Ukraine

Source: UVCA, Tech Ecosystem Guide to Ukraine 2019 by Unit City

$ million

2012 2013 2014 2015 2016 2017 2018 2019

59

13289

259

337

554

3988

IT outsourcing is the first level

in the technology and software value chain.

However, Ukraine is also rich in successful

start-ups that have attracted millions of

dollars in investment annually and become

global leaders in specific areas.

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“In Ukraine, unfortunately, there are not many jobs with a high salary level, and the revenue growth of IT industry contributes to the growth of the country.”

“Global Logic Ukraine showed remarkable results - we increased by almost 24%. From year to year, we rebuild key business goals and grow significantly faster than the market. This is important for the development of the entire company, as Ukraine is one of the key locations of GlobalLogic by the numberof engineers and the size of the business.”

Yuriy Antonyuk

Igor Beda

Head of EPAM Ukraine

CEO Globallogic Ukraine

global players100

+

have located R&D facilities in Ukraine,

further drivingthe high-tech

sector

TOP-15IT companies in Ukraine

by the number of employees,

January 2020

Ukraine emerges as a global R&D hub

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AGRIBUSINESS

1

Rich Natural Resources 42 M 60 M of agricultural land

hectareshectares

Historically known as the “bread basket of Europe”, Ukraine is set to become the “food basket” of the world. With 33% of the world’s black soil (chornozem) concentrated in Ukraine, a favourable climate and proximity to key markets, Ukraine is becoming an agriculture export powerhouse.

of land

Sunfloweroil

RapeseedNutsSunflower

meal Wheat

2 3 4 5

in the Global Food MarketUkraine’s Place

4.3 4.76.2

10.89.5 9.9

12.8

17.9 17.0 16.714.6 15.3

17.918.8

22.2

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 20190

42

68101214161820

22

Agro and food exports growing at average of 9% for over 10 years

Source: State Statistics Service of Ukraine, Ministry of Agrarian Policy and Food of Ukraine

$ billion

33 M arable

hectares

Corn, Burley, Rye, Honey,

Sorghum

MY2018/19, the place in the world export by volume

USA9.98

Argentina7.12

Egypt7.09

China6.14

Ukraine

5.71

EU5.32

World

4.24

Egyp

t6.

40 EU5.

91

Chin

a5.

63

Ukra

ine

4.11

Wor

ld

3.52

USA

3.47

Canada

3.35

Argentina

3.00

Turkey 2.60

USA 2.40

Canada 9.24

56%

INCR

EASE

OPP

ORT

UN

ITY

75% INCREASE OPPORTUNITY

Argentina 8.06

European Union 7.47

Ukraine

China 6.327.16

World

5.79

012345

61% INCREASE OPPORTUNITY

67891011

WHEAT

COARSE GRAIN

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Ukrainian agriculture, already enjoying substantial cost advantages due to attractive land rent prices, extremely fertile soil, competitive wages and logistics, still has plenty of headroom for productivity growth as the yields per hectare remain below Western benchmarks.

Yields, metric tons per hectare2019/20 proj. by USDA

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With additional investments in management, educa-tion, irrigation, farming techniques, logistics and value added production, Ukraine is poised to double its food exports.

Yield growth thanksto precision

agriculture, newhybrids and crop

protection products

Shift from agricommodities

export to value- added products

trade

2008

2019

Competing in high-margin niches,

including fresh and organic products

Certification fornew markets

entry

Customers’ loyalty increase

through Ukrainianbrands’ awareness

growth

Turkey ChinaFrance Germany Romania USA Ukraine

Ukrainian agriculture potential

Use efficiency of land bank, value added in the agricultural sector,

Source: Agribusiness 2018/2019 Infographic Report

thou. $ at constant prices of 2010 per hectare of agricultural land

1.62.2

1.01.51.4 1.6 1.8

1.20.7 0.9

0.4 0.4 0.3 0.4

20

High Value-added Agri Segments in Ukraine N

iche

Agritech Biofuel development Value-added food processing

Why

Ukr

aine

?Fi

nanc

ials

Utilising sensors, drones and data management systems, agritech is poised to assist Ukraine in unlocking its potential in the agricultural sector.

Ukraine’s agricultural export is comprised mostly of raw and semi-finished goods, leaving huge space to establish value-added food processing in Ukraine.

Production of fuel through biotechnological processes from renewable sources

$22.2 billion value of exports of Ukrainian agrarian companies

Up to 25% net profit margin

Global packaged food market by 2020 will be a $ 3.03 trillion Industry

In 2018, total processed food production in Ukraine was $ 17 billion

Gross profit margin in the 40% to 60% range

Gross potential of 61 million tons of coal equivalent

Market value of $ 2 billion

30-35% net margin

Low energy costs

Land fertility

Abundant corn and sunflower are the primary source for biofuels

Tax exemptions and subsidies

Ukraine is one of the top 10 exporters of the world’s most popular agricultural crops

Extensive arable land and top land fertility

Strong local market

Well-developed agri-sector

Relatively limited competition in the field

CO2

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“We in Cargill believe that Ukrainian agriculture has tremendous growth potential. We want our company to be part of this growth. Cargill has been active in Ukraine for more than 20 years and we remain dedicated to this market. We have a long-term view and are continuously looking into new investment opportunities”.

“This investment demonstrates Bayer’s strong commitment to Ukraine. With more than 25 yearsof successful history in Ukraine, we have always been a key player in developing the country’s agricultural sector. Bayer will continue working with farmers in Ukraine and is also planning to export its high-quality corn seed to EU states.”

Dr. Dirk Backhaus

Martin Schuldt

Member of the Executive Leadership Team and Head of Product Supply for the Crop Science division of Bayer

CEO of Cargill Ukraine

whi

ch c

ompr

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one

third

of t

he w

orld

’s su

pply

Ukra

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is th

e w

orld

lead

er in

sun

flow

er o

il pr

oduc

tion

$ 1.8 billion

Unlocked FDISuccess Stories: Agri-Investment in Ukraine 2015-2019

There are about 200,000 village farmsteads appropriate

for agritourism. According to experts, an average project

will be able to earn up to $100k in annual revenues.

Limited competition in the field and EBIT

margin of up to 54% makes it an attractive

investment

per average project

100k $

54 %

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AGRITOURISM

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MANUFACTURING

Volume 5

22

Investment OpportunitiesUkraine has a large manufacturing base, which historically has

been concentrated in heavy industry, including mining, railway rolling stock, machine tools, aircraft engines, as well as light

manufacturing, and the food industry.

Ukraine is one of the few nations with a developed aerospace industry, building civil, military and cargo aircraft, as well as supplying space technology:

full cycle of design, production and operation of advanced aircraft

an important supplier of turbine engines for aircraft, helicopters and aerospace industries worldwide

Ukraine’s automotive industry has become one of the fastest growing manufacturing sectors owing to a favourable combination of increasing

demand, availability of skilled workers, competitive salaries and integration into the European supply chain. In addition, as new vehicle sales increase,

domestic vehicle manufacturers are increasing production figures and new investment opportunities are being explored, such as electric vehicles and

batteries, with Ukraine possessing the world’s largest lithium reserves.

Ukraine’s heavy manufacturing sector is dominated by an extensive network of machine building enterprises. Over 25% of the population is employed by manufacturing companies involved

in mining, railway rolling stock, energy, farm equipment, and road construction equipment. This manufacturing capacity, together with excellent

educational institutes, has enabled Ukraine to become a global competitor in specialized industries such as

production of aircraft engines and equipment for the light and food industries.

Ukraine’s garment industry is the latest sector to experience an unprecedented boom. A number of global fashion brands, such as Hugo Boss, Marks & Spencer,

Tommy Hilfiger, already have production facilities in Ukraine and enjoy benefits of cost-efficient manufacturing. Ukraine is also emerging as a fashion hub –

elegant and striking design collections from Ukraine have now captured the attention of elite fashion houses and their clients around the globe.

AUTOMOTIVEPARTS

AEROSPACE

HEAVY INDUSTRY

FASHIONINDUSTRY

8

20 +

15 +

5

220k +

> 150 5k

60k

MANUFACTURINGENTERPRISES

GLOBAL AUTOMOTIVE COMPANIES

30 +

AUTOMOTIVE PLANTS

600 $

MILLIONof investment

GLOBAL FASHION BRANDS

DESIGN BUREAUS

EMPLOYEES

UKRAINIAN ROCKET LAUNCHES

since independence in 1991

GRADUATES WITH AEROSPACE ENGINEERING DEGREES

annually

ENGINEERS, SPECIALISTS AND WORKERS employed in the industry


Vol.5

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Skn

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“Ukraine has a huge potential and I hope the government will continue with the reforms needed to unleash this potential and improve the life of Ukrainian people and the business environment in order to be able to attract more investments.”

“Of the problems we had when we first came here in 2003, 90% have gone. The Danish Business Association and European Business Association are constantly working through the administration to make life easier for investors. Ukraine is a good investment country; it’s also a good country to live in. Ukrainians are highly educated, and here they are more Western-minded in business and politics.”

Michael Aleksandrakis

Lars Vestbjerg

Managing Director PM Ukraine, Caucasus and Moldova

CEO of SIKA Footwear, a Danish footwear manufacturer, and President of the Danish Business Association

$ 1.8 billion

Unlocked FDI

Ukraine’s pharmaceutical sector is one of the fastest growing and most crisis-resistant consumer industries

in the economy. A major growth driver is import substitution, building a strong case for international

pharma companies to increase investment through purchase of existing players or building their own

manufacturing in Ukraine.

PHARMACEUTICALS

Success Stories: Manufacturing Investment in Ukraine 2015-2019

23k +110 +

COMPANIES LICENSED TO MANUFACTURE

MEDICINE

15 %

MARKET GROWTH IN-KIND IN 2016-2019

2009from

GMP AND EU RULES ARE IMPLEMENTED

EMPLOYEES

15-25%The immense consumption gap versus peer countries is another growth driver: per capita pharmaceutical expenditures in Ukraine are only 15-25% of the levels of neighboring countries.

24

Volume 6

Ukraine has a diverse endowment of natural energy resources and continues

to be a net exporter of electricity.

Investment Opportunities

Ukraine is becoming more energy efficient, however there is still much room for improvement

1995 2000

2018 (fact) 2035

2010 2018

Sources: World Bank, International Energy Agen-cy, National Commission for State Regulation of

Energy and Public Utilities, Naftogaz

UkraineEU countries

In 2017, the Cabinet of Ministers of Ukraine approved the Energy Strategy of Ukraine that corre-

sponds to global tendencies: increasing role of renewable sources of energy and conservation on natural gas role.

Energy Strategy of Ukraine until 2035 “Safety, Energy Efficiency & Competitiveness”

Energy consumption structure and volume according to Energy Strategy of Ukraine

Source: Ministry of Energy and Coal Industry of Ukraine

2018 and 2035, m toe (%)

Coal Biomass & Waste

Natural gas Hydro

Nuclear Geothermal

Oil products

Solar & Wind

Total share

of RES

Total share of RES

5.2 %25 %

30.2 % 2927.3

25.0 %

12.5 %

11.5 %

9.8 %

3.4 %7.3 %

2.1 %

1.0 %

1.0 %

0.6 %

0.2 %

24

12

11

10.6

3.27

21

0.90.5

27.6 %

26.1

23

25.6 %

22.1 %

10.4 % 10

0.2

Energy costs to create $ 1,000 added value

1995–2018, kg of oil equivalent / ths USD

of GDP (2011 PPP)

129 114 100 85

628

567

369

242

ENERGY

250

200

150

100

50

0

500 450 400 350 300

51

YEA

RS OIL

48

YEA

RS

GAS

273 YEARS URANIUM

Sufficient reserves of traditional energy resources

Number of years at current production

level

1089 YEARS COAL

34 bn t

219 kt

100 m t

1032 bcm

Traditionally, Ukraine has a powerful and developed energy sector, including: gas, electricity, hydro, coal and nuclear. Ukraine’s way

to energy independence, according to Energy Strategy of Ukraine 2035, and recent reforms in the energy sector open

new opportunities for global energy players and small investors in Ukraine.

25

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Natural gas occupies a significant part of the energy mix in Ukraine and currently constitutes 30% of the nation’s

energy demand. With gas consumption at approx. 30 bcm, Ukraine imports one third of its total needs.

Given Ukraine’s current natural gas production, the proved reserves base is underutilized. The government`s recent deregulation efforts in the gas sector and the launch of open auctions of special permits for oil and gas extraction will attract more private com-panies with advanced technologies and boost gas production in Ukraine.

Gas Proved Reserves & Production, bcm

Sources: Naftogaz; BP Statistical Review

of World Energy 2019

1 604 Proved reserves

Years of production

Annual production

21.0

49.1

1032

32.3

18.2

588

40.6

4.6

187

9.5

10.7

102

4.0

16.0

64

120.6

13.3

ImportProduction

Naftogaz (UGV)

Ukrnafta

Privatecompanies

Net changes in stock

Total consumption

Transmission needs

End users

Households

District heat-ing

Industry

Ukraine’s Gas Balance 2019, bcmSource: Naftogaz, Ukrtransgaz

14.9

20.7

14.3

25.5

8

6.2

11.3

5.229.8

4.3

1.2

4.6

7.2

7.1

OIL & GAS

are

the

larg

est i

n Eu

rope

(31

billi

on m

3)Uk

rain

e’s g

as s

tora

ge fa

cilit

ies

INFRASTRUCTURE

26

AIRPORTSOF RAILWAYS SEA PORTS

RIVER PORTS

OF ROADWAYS

INFRASTRUCTUREUkraine’s geographic location, combined with 17 free trade agreements

with 46 countries (including DCFTA with EU) makes it an importanttransit corridor for trade and travel between Europe, Asia and Middle East.

EASA certification

of cargo handled inseaports in 2019 (+18.4%)

this is the first arrival of loco-motives to UZ in 10 years

24.3 mln

containers handled in seaports in 2019 (+18%)

to the EU have been launched

share of low-сost inUkraine's interna-

tional connection in 2018

included in thetransport system TNT

will consult UZ on reforming the enter-prise management mechanisms

170k 22k 19 13 16km km

for the first time in thehistory of international

partnership, the EU opens its sky to a non-

EU member

passenger traffic through the airports

of Ukraine in 2019 (+18.5%)

30%

160 mln tonnes 1 mln TEU 8 ports

30 GE locomotives are already in Ukraine 21 rail routes Deutsche Bahn, the largest

railway operator and infrastructure owner in Europe,

AVIA

TIO

NRA

ILW

AYM

ARI

TIM

E

Seaport Olvia

Potential to provide services to over 6 million people of nearby districtsPassenger terminal reconstructionCargo terminal construction

by th

e nu

mbe

r of p

eopl

e w

ith h

ighe

r edu

catio

nUk

rain

e ra

nks

4th

coun

try

in th

e w

orld

27

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US

INES

S A

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S

Invest in UkraineNOWwww.ukraineinvest.gov.ua

CONCESSION OPPORTUNITIESUkraine has an extensive amount of obsolete

infrastructure. Recently adopted Concessions law provides a lot of investment opportunities

for its renovation and modernization.

Regional Airports Development

Railway System Upgrade

Seaports Concessions

Kharkiv

Bila Tserkva

Zaporizhia

Chernivtsi

Potential to provide services to over 4 million people of nearby districtsPassenger and cargo terminals construction

Potential to provide services to over 4 million people of nearby districts434 k passenger flow in 2019

Passenger terminal constructionInvestment amount – $43-45 million

Kharkiv

Dnipro

Mykolaiv

Khmelnytskyi

Annually served – 5.7 million passengers




Investment amount – $5.6 million

Investment amount – $8 million



Unique facility in Ukraine, which handles rail and auto ferry lines, as well as “ro-ro” vessels Rail and road access 3 berth with 9.7 m depth

2.6 ha of total area

5 berths of 1,370 m total length and 9.5-11.5 m depth

1000-seat concert and exhibition hall

Ferry Complex in Chornomorsk Sea Port

Seaport Kherson

First Seaport

Concession Success Stories

The winner of the concession competition - company Rysoil-Kherson.

Fixed concession payment - $500 k

Investment liabilities - $12,5 million

Funds for local infrastructure development - $750 k

The winner of the concession competition – company

QTerminals from Qatar Annual concession payments –

$3,4 millionInvestment liabilities – $142 million

Funds for local infrastructure development – $3,3 million

Passenger Complex in Odesa Sea Port

28

Business AssociationsVolume 6

Association of Ukraine -European Business

Cooperation Assistance

International Turkish Ukrainian

Business Association

Camera di CommercioItaliana

per l’Ucraina (“CCIPU”)

International Chamber of Commerce

European BusinessAssociation

Ukrainian Chamber of Commerce & Industry

British Ukrainian Chamber of

Commerce (“BUCC”)

Norwegian Ukrainian Chamber

of Commerce

Chinese CommerceAssociation

U.S. - Ukraine Business Council

French Chamberof Commerce

Ukrainian Venture Capital and Private

Equity Association

American Chamber of Commerce

German-Ukrainian Chamber of

Industry & Trade

Business Sweden in Kyiv

Polish-Ukrainian Chamber of Commerce

Danish Business Association

UkrainianAgribusiness Club

British Business Club in Ukraine

Non-Governmental Organization «SUP»

Canada-Ukraine Chamber of Commerce

Swiss-Ukrainian Business Chamber

European Economic Chamber of Trade,

Commerce and Industry

Ukrainian League of Industrialists

and Entrepreneurs

www.ukraineinvest.gov.ua Invest in UkraineNOW

was

dev

elop

ed b

y Uk

rain

ian

scie

ntis

t Bor

ys P

aton

The

wor

ld’s

first

dev

ice

for w

eldi

ng in

spa

ce

29

PLACE FOR NOTES

PLA

CE

FOR

NO

TES

Regional Support Advocacy

Introductions Information and Insight

Navigation and Guidance Key Sector Expertise

Headquartered in Kyiv with support to the regions

Close cooperation with regional partners

Connections to all levels of government,

business associations and investors

Local expertise

Support informed decision making

Assistance in identifying opportunities

Problem solving

Personal approach

Professional consultancy in high growth sectors and niche markets

Important voice for business

Direct access to government

the government’s investment promotion office created to attract and support investment in Ukraine

clients with objective, practical advice on doing business in Ukraine

directly with investors and the Government on improving the easeof doing business in Ukraine

one-stop services free of charge

WE ARE

WE PROVIDE

WE WORK

WE OFFER

About us

Invest in

Ukraine

The Cabinet of Ministers of Ukraine12/2 Hrushevskoho street, office 148Kyiv, 01008, Ukraine

Find your opportunities here!

+38 044 256 7832


UkraineInvest

© UkraineInvest, 2020


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